DIVIDENDS AND TAX
Reinvesting dividends on US domiciled ETF
I have VTS and VEU. These ETFs don't offer DRPs. If I choose the 'Automatically send dividends to auto-invest account' option, the dividends will be used to buy according to my AutoInvest set-up, right? But I'll have to deal with the tax in whichever financial year the dividend was paid? Unlike a DRP?
Roxana Bear.
7 January 2023
1 Comments
over 1 year ago
Hi Roxana.
If your dividends are sent to your auto invest account, then yes my understanding is that money will be used to follow your auto invest instructions that are setup.
While this isn’t as convenient as a DRP, here’s an important point: Even if you use a DRP, you still have to declare your dividends in any financial year. Just because someone chose to reinvest that money into more shares, doesn’t mean they escape paying tax on that money.
So owning VTS VEU it doesn’t matter how those dividends are reinvested, it needs to be declared as income regardless.
Hope that helps.
Dave
Like
1
•
Reply4000 characters left
Related posts
Dividends and Tax
Investing and tax time
I am brand new to investing and up until this date have had very simple tax returns which I was comfortable completing m...
Dividends and Tax
Buy and hold - Share Price, Dividends and Capital Gains/Losses
I'm looking to sense check my understanding... 1. I'm just starting to build my portfolio, so trying to hit the ground ...
Dividends and Tax
How do dividends work
Hi I've just joined Pearler and am looking to invest in VAS. Will I get dividends paid with this investment? and if so,...